Category: Small Business

By Omobola  Tolu-Kusimo

Law Union & Rock Insurance Plc is to complete its recapitalisation ahead of regulatory deadline of December 31, 2020, its Managing Director, Ademayowa Adeduro, has said.

Adeduro, who spoke in an interview in Lagos, said the company has reached 85 per cent completion of its recapitalisation. He said the company has got approvals to complete the processes.

He stated that the underwriting firm first announced on the floor of the Nigerian Stock Exchange (NSE) on February 28, 2020, that a Transaction Implementation Agreement (TIA) had been signed between it and Verod Capital Management (Verod); with the intent to acquire Law Union & Rock 100 per cent.

He explained that Verod is an anglophone West Africa Private Equity firm focusing on investing equity and equity-linked capital in growth companies across various consumer-driven sectors, including the industry.

He stated that the company has secured the nod of the National Insurance Commission (NAICOM), the Nigeria Stock Exchange (NSE), and the Federal Competition and Consumer Protection Council (FCCBC), allowing Verod Capital acquire 100 percent shareholding of the company.

He added that Verod has also placed the required funds to meet the statutory N10 billion paid up capital for general insurance.

He said: “The acquisition would be achieved through a Scheme of Arrangement, where all shares would be transferred to Verod Capital as regulated by SEC.

Upon successful completion of the Scheme of Arrangement process, a Court Ordered Meeting or company AGM will authorise the acquisition. This meeting is expected to take place in August 2020.

“It is noteworthy to recall that the company witnessed impressive growth in its 2019 financial accounts, posting a 254 percent increase in Profit after Tax, from N226.5 million in 2018 to N802.8 million, thereby picking up its capitalisation journey on a strong note in 2020.”

Ademayowa further added that “keeping in good faith with the Transaction Implementation Agreement (TIA) signed by Law Union & Rock Insurance Plc and Verod Capital Management Limited, the latter has made the mandatory 10 percent deposit required, which is in excess of N500 million.

Based on these activities, the company is progressing and looking to close all recapitalisation process before the end of the year, with a reassuring posture for our stakeholders and partners”.

“We are going to play big going forward. Our new investor has previously invested in UBA Metropolitan Life now called Tangerine Life and they have equally invested in ARM Life. Incidentally we have a partnership with ARM Life prior to the acquisition by Verod.

Our Life business was sold to ARM Life during the 2007 recapitalisation. However, we are going to be associate companies under the same ownership structure. While it is not going to be a composite insurance company, we would have joint services since we have joint ownership and thus enjoy joint business exchange,” he noted.

The renewable energy sector presents opportunities for investment to small and big entrepreneurs. To this end, some empowerment outfits – Nigeria Climate Innovation Centre and All On – are helping Nigerians to transit to renewable energy economy, writes DANIEL ESSIET

Global warming is forcing nations, including Nigeria, to open their minds to new possibilities. This has emboldened non-profit organisations to begin the campaign to enable Nigerians to maximise the potential of the renewable energy sector to attain a green technology hub status.

They are pushing new renewable energy technologies that have been tried in other parts of the world. These include off-grid and local grids, rooftop solar, batteries, large- scale solar, which are known for energy efficiency and as means of electrification; lifting people out of poverty and reducing emissions.

Two of these non-profit organisations are the Nigeria Climate Innovation Centre (NCIC) and All On. They work with some energy start-ups to promote innovations and entrepreneurship.

They have been pursuing renewable energy, especially solar. As a result, a new wave of investors and social enterprises have sprung up and new businesses and increasing the availability of products tailored to off-grid domestic energy customers

Start-ups are taken through various stages of product development, including training, physical prototype development and testing.

Speaking during an online pitch event for 12 renewable energy entrepreneurs, the Chief Executive, NCIC, Bankole Oloruntoba, said Nigeria has a huge potential for solar power and other renewable energies.

Buoyed by this, NCIC is undertaking a campaign to ginger more entrepreneurs to explore opportunities in the booming sector and support them to launch their businesses. It provides young entrepreneurs with deep dive business coaching and technical assistance.

After the training the young entrepreneurs are exposed to funders to support them financially to power their start-ups.

All On, on the other hand, provides services, such as business and technology training, to entrepreneurs.

Its Chief Executive, Dr. Wieber Boer, said the renewable energy sector presents opportunities for investment.

According to him, Nigeria has been facing tough times with shortage of power. He said his organisation was supporting start-ups to use renewable energy to meet their energy demands.

He said the role of his organisation is to encourage Nigerians to adopt innovative, sustainable technologies.

A panelist, who is the Executive Secretary, FC4S, Emmanuel Etaderhi, urged more efforts towards developing local capacities to manufacture solar energy products and components.

According to him, renewable energy will help Nigeria on the path to inclusive and sustainable industrial development, as well as make the country’s economy greener.

He said the sector was expected to contribute to creating new jobs and support entrepreneurship in the renewable energy sector.

The pitch marked the end of a five-month incubation programme of NCIC & All On designed to identify, train and empower idea-stage entrepreneurs in renewable energy.

One of them is Afrinet Power, whose Chief Executive, Nonso Asuoha, said the start-up provides a unique pay-as-you-go solar power model that makes it easy for Nigerians to enjoy clean electricity with less financial burden.

By using renewable energy to provide electricity access to the unserved/underserved, he added that Afrinet seeks to reduce emissions from fossil energy sources to protect the environment and help achieve Sustainable Development Goals.

The Founder/Chief Executive, Bin Energy, Kalio Sobelemabo, said the start-up uses organic waste that would otherwise go to landfills to produce methane gas for power generation.

The Chief Executive, Climate Innovation Motors, Emmanuel Okpala, said the firm provides sustainable and climate friendly transport solutions through the development, sales and management of solar Electric Vehicle (EV) charging stations for homes, offices and public use.

MySolarBi Chief Executive Israel Faleye said through its platform, users could save 20 percent less than market averages on their solar installation costs while installers could save up to 67 per cent on their soft costs.

He added that MySolarBid users would be able to compare notes across veriûed solar installers and ûnancing options with access to information on solar technology.

Other start-ups founders who spoke included the Chief Executive, Neigh Energy, Anifowoshe Clement; founder, Homefort Energy, Opeyemi Owosho; founder, Quadcycle, Nonso Osakwe, Chief Executive, Quadloop, Dozie Igweilo; the Chief Executive, Supanergy, Olushola Tutuola; founder, OBIIH Rotary Inverter Generators, Harrison Obi; founder, Sollef Soleff and founder/CEO, Rouz Energy, Dumebi Ezedebego.

For many years, low quality footwear dominated the market, which make them less competitive in the global market. To check this, many Nigerians are rooting for the production of quality footwear, writes DANIEL ESSIET

Thinking of a shoe brand characterised by quality and durability, one will not need to go too far before arriving at Italian and Spanish shoes. However, these brands are desirable but unaffordable to most Nigerians who are mainly low-income earners.

To solve the problem, young Nigerians are creating quality and durable shoes that are affordable. They have made shoes which made inroads into the market.

Some cobblers based in Lagos and Abia states are producing shoes which the Georgio Brutinis and other top designers would envy.

One of them is the Chief Executive, AB Leather Work, Abraham William, a footwear producer in Lagos. He  learnt the trade in 2002 in Akwa Ibom State and thereafter came to Lagos to set up a shop.

Though he started with  a small capital, the business has grown like an oak. His customers comprise those from outside Lagos. People also come to him with their designs for production.

He has also expanded into imparting his skills to others such that over five apprentices have passed out of his workshop.

Regrettably, he said, unemployed youths, who could make a living from shoemaking, do not like learning trades under apprenticeship.

To grow the industry, he said the youth need equipment, and technical knowhow. He said shoe producers needed finance to buy the expensive input, such as leather, trimming and cutting machines, which are expensive because they are imported.

He observed that though Nigerians preferred imported shoes, some still ordered from him.

The graduate of Business Administration said young people could acquire skills and contribute to the growth of the footwear and leather  industry.

He added that quality leather plays a vital role in the production of shoes, as this convinces the buyer that he has bought a good product.

The founder, Right Legs, Temilade Adegbite, specialises in creating men’s, women’s and children’s footwears, such as shoes, sandals and slippers, in unique designs.

She started Right Legs to cater for those customers who were in need of big-sized footwears, and for kids who desired good school footwear.

Adegbite, who has big feet, said getting the right designs was not easy for her and others. So, she thought of creating unique shoe designs in all sizes. Today, Right Legs offers quality and classy footwear in various  designs and sizes.

Before the lockdown caused by the Coronavirus (COVID-19) pandemic, traders from West African countries stormed Aba in Abia State to buy various designs.

Traders from Chad, Ghana, Togo, Niger Republic and Cameroon came to the Ariaria International Market in Aba to buy shoes and other leather materials.

And when they could not make it to the market, they sent their product specifications to the shoe manufacturers via text messages or phone calls for production and transportation to their destinations.

According to reports millions of shoes are exported from the Ariaria International Market to the West African coast.

The Aba leather industry is made up of shoes, trunk boxes and belts. It provides employment for  thousands,  many of whom specialise in designing, patterning, cutting, skiving, stitching, peeling and finishing. It comprises clusters, such as Powerline, Imo Avenue, Bakassi, Aba North Shoe Plaza, Omemma Traders and Workers, ATE Bag and Ochendo Industrial Market.

In 2017, Abia State Governor, Dr Okezie Ikpeazu, signed a $1.5 billion deal with a Chinese shoe firm during the First Nigeria-China Governors Investment Forum. The Abia State Government brokered the deal with Huajian Shoe Industry in Dongguan, Guangzhou, China for the establishment of a shoe factory in Aba.

The factory is expected to produce 5,000 shoes daily and create 10,000 direct jobs and 50,000 indirect jobs. Ikpeazu, who signed the deal with the Group Chairman of the Huajian Group, Mr. Zhang Huarong, is optimistic that it would bring the much-needed competition to indigenous shoe manufacturers in Aba. It would also phase out manual shoe manufacturing techniques employed by shoemakers.

In addition, the deal includes the investor training 100 Aba shoemakers in China on the use of the latest technology in shoe making. The trainees are expected to form the bulk of the staff members of the Chinese factory in Aba.

“The major constraint our shoemakers have is that most of their work is done manually. This has gone on for several decades.

We must change that. So, we plan to introduce them to automated shoe production and China is key here. The goal is to achieve 75 percent automation locally between now and the next 24 months.”

“This factory will create 10,000 direct jobs and 50,000 indirect jobs from the secondary markets that will be created,” the governor said.

The state government started the Made-in-Aba campaign to attract foreign investors to the state and promote Nigerian shoes to major markets abroad.

The President, Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, said the future is bright for youths. His words: “The shoe-making industry in Aba is worth over N200 billion, but the size is still small compared with the number of players involved.

The sector is not restricted by education, government policies, gender nor need for huge capital and infrastructure. The demand for shoes keeps increasing on a regular basis.

If the government can succeed in curbing the influx of imported shoes into the country, the demands for local shoes will remain unmet and thus open up the need for more young ones to venture into it.”

Egbesola added: “Shoe business remains one of the businesses that can never wane nor fade off. It is an essential need and the demand for it will keep soaring.

It is advisable to encourage the young ones to tap into the unlimited opportunities and potential that are in the shoe business. If such ones can add creativity, innovation and uniqueness to the business, sky will be the limit.”

The President, Association of Micro Entrepreneurs of Nigeria (AMEN) Prince Saviour Iche, said Nigeria  is blessed with great entrepreneurs and innovators. Faltering electricity and logistics, according to him, are hampering the efforts of entrepreneurs.

Iche noted that micro entrepreneurs need the support to thrive.

At the Made-in-Nigeria Shoe expo in Lagos, shoe makers urged the Federal Government to halt the import of second-hand shoes, noting that this was hurting the local footwear industry.

They canvassed an enabling environment for petrochemical firms, which act as ancillary industries for raw materials, such as poly urethane and poly propylene chips required by footwear and leather industries to thrive.

According to them, there are few petrochemical firms in Nigeria with minimal capacity to meet local demand.

The National Coordinator for Made-in-Nigeria Shoe Expo, Mr. Emmanuel Ugbodaga, appealed to the government, particularly the National Orientation Agency (NOA), to address the consumption complex Nigerians display in their choice of foreign labels over local ones.

He said: “Even when we produce high quality shoes at affordable prices, Nigerians still believe that foreign ones are superior. This mentality requires a re-orientation of the mind-set of Nigerians by the government.’’

The Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ambassador Ayoola Olukanni, described the footwear and leather sector as promising, stating that NACCIMA is committed to supporting the sector.

“We are working on modalities for access to finance to help grow the capacity of micro-enterprises in the sector,” Olukanni said.

The co-Chief Executive Officer, Tecnfilm SPA, one of Italy’s largest manufacturers of raw materials for the production of soles, who was at the   at the fair, Roberto Cardinalli, said he was delighted to be in the country for the first time.

He added that his firm was ready to partner Nigerian firms to source quality and affordable raw materials for the production of footwear soles. The expo offered free master classes to help improve the skills-set of artisans.

Small and medium Enterprises (SMEs) are at the risk of closures and large staff layoffs, no thanks to the lockdown caused by the corona virus impact. But there is a way out, writes DANIEL ESSIET.

Small and Medium Scale Enterprises (SMEs) make up the bulk of businesses in Nigeria.

For the government to achieve  sustainable growth, these firms must grow and create jobs.

However, the shutdown in the  country has affected the fortunes of many SMEs.

Aggregated losses are estimated at milions of naira, according to analysts.

This comes on the back of naira devaluation and the border closure that has sent raw materials’prices rocketing in the past year.

Following this, SMEs are in dire straits because of the coronavirus outbreak. Thousands of small businesses could shut down, if the much-needed financial relief doesn’t get to them in time.

As the outbreak spread, the Federal and state governments have  shut markets and halted long-distance movement.

This has created massive problems in the SMEs sector. As a result, a lot of entrepreneurs are in a very distressed situation.

Leaders in the sector, though appreciating the government’s plight are concerned that the measures to control the spread of the pandemic have led to economic problems.

Speaking with The Nation, the President, Association of Micro Entrepreneurs of Nigeria (AMEN), Prince Saviour Iche, expressed fear of a sudden surge in layoffs as well as shutdowns of many small manufacturing businesses.

For him, the scope of layoffs would help determine how badly the outbreak would damage the  economy.

To prevent this, he wants the government to set aside billions of naira as loans to small businesses and for liquidity assistance for specific industries.

According to him, COVID-19 has resulted in mass production shutdowns and supply chain disruptions, adding that it has caused ripple effects across all sectors, especially the SMEs.

According to him, most small businesses do not have the financial muscle to pay workers for long, if their earnings dry up.

He said to cushion the effects of the pandemic, the government has to grant financial incentives to small businesses that retain workers instead of laying them off.

The measures include loans, and tax credits.

He said small businesses need support because they are struggling with border closure which made it difficult for them to get raw materials.

He urged the government to implement measures that would mitigate the effects of the virus on the economy. These, he said, include reducing interest rates and injecting liquidity into the banking system.

Iche observed that the business climate was still too harsh to encourage more investments from small businesses.

Colloborating, the President, Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, said COVID-19 has begun to impact on the small business sector, with the prices of essential ingredients for local production manufactured in China rising or being unavailable.

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He said before the pandemic there was the impact of border closure that restricted imports of essential ingredients, which led to a shortage in the country.

For instance, he said sachet and packaged water producers were battling high cost of production materials.

He said one of the raw materials used for sachet water production is imported from China. From N600,000 a tonne, Egbesola said the price has risen to N1.3 million since the border closure.

Despite this, he said the producers have managed to produce without increasing the prices. He said the retail price of the ‘pure’ water sachet bag is still sold at the same price, adding that there was no price adjustment due to hike in the cost of raw materials.

According to him, the hike has hit them and they must get their head above water to survive.

As a result of the lockdown, he said the small business sector loses an estimated N9 billion weekly since the government took the decision to restrict trading activities.

He said the industry has been scrambling to react since the market closure caught a lot of entrepreneurs and small businesses unprepared.

Meanwhile, the Central Bank of Nigeria (CBN) has announced a credit relief of $136.6million to businesses affected by the pandemic.

The CBN Governor Godwin Emefiele said households, small and medium-sized enterprises, airline service providers, hotels, health care merchants will benefit from the funds.

“The CBN hereby establishes a facility through for households and small- and medium-sized enterprises (SMEs) that have been particularly hard hit by Covid-19,” he said at a news conference.

He noted the pandemic has “significant adverse consequences” for the global and Nigerian economies, including crude oil supplies, stock, sporting events, financial markets, entertainment and hospitality industries.

Other interventions announced by the bank include reduction of interest rates for the loan from nine to five per cent retroactively.

Two entrepreneurs, who have made a success in beekeeping and honey production, are focused on training and skills development to improve the nation’s competitiveness in honey production, DANIEL ESSIET reports.

For Bidemi Ojeleye, a hobby in beekeeping has evolved into a thriving business venture with about 4000 hives.

The founder/Director, Centre for Bee Research &Development (CEBRAD), said: “I started beekeeping venture about 33 years ago as a hobbyist in Ibadan.

During the period, my experience was very minimal, but I tried to boost it through further study and also by attending conferences and workshops.

He has apiaries in  Ibadan and Ile- Ife. He told The Nation that every successful beekeeper must be ready for bee stings at a the early stage.

According to him, beekeeping skills are essential for one to be successful in the business. These include knowing how to handle the honey once it is extracted among other things.

Ojeleye, a certified Master Beekeeper and National President of Federation of Beekeepers Association of Nigeria (FEBKAN), believes working with a mentor is one of the best ways to grow in it.

One thing that helps him is visiting the farm regularly to inspect the  bees and clean  the hives.

He considers the hive location important to honey production and ensures the hives are located near to floral sources and water.

His secret of success: “My sustainability in the business has been my ability to learn from others irrespective of their experience and sincerity with the quality of my honey.”

He added: ‘’ln 1999, my company of two other trustees, and I established CEBRAD, the only non-governmental organisation (NGO) on bee research in Nigeria then.

With this NGO, I was able to handle beekeeping projects for individuals, national and international organisations, federal state and local governments to mention but few.

‘’I had over 4,000 hives in Igbeti, Olorunsogo Local Government, Oyo North, part of which were being used for research.

This assisted us with the  data conducted for Raw Materials Research & Development Council and it also spurred my basic interest in showcasing my experience in beekeeping through publications.”

Words of mouth and satisfied customers have been the impetus that has made the business a success.

He advised existing and upcoming commercial beekeepers  to make sincerity their watchwords. Said he: ”God will not forgive anyone that sells adulterated honey to people who may need it for health purpose. I also want to advise consumers to be weary of the type of honey they buy to save them from poison.”

CEBRAD also engages in training and consultancy apart from sales of honey and other beehives products.

For investors, Ojeleye said the  industry is a gold mine waiting to explored.

Aspiring beekeepers also can purchase queen honeybees from him.

Like Ojeleye, Daniel Oduntan, the Chief Executive Officer, Bee-Craft Consult, Greater Salt Lake City Area, United States, is one of the international beekeepers, in Nigeria.

He runs a venture, which manufactures, supplies and trades in honey. Today, his organisation has trained over 1000 farmers.

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The German-trained queen bee breeder-cum apitherapist is on a mission to encourage commercial beekeeping in Nigeria. With over 27years’ experience in the business, Oduntan is also a trainer and resource person in Nigeria and the US.

In Abeokuta, the Ogun State capital, Oduntan established the Institute of Vocational Beecraft to train people in commercial beekeeping. He also trains growers and smallholders. At a point in time, he was one of the major trainers in the country.

Beekeeping has not only increased his income level significantly, it has also enabled him to provide employment to many youths. His farm produces honey and bee-hive frames.

It provides entrepreneurship and supports market linkage, giving input on new technology for honey processing and extracting to farmers.

While in the US, Oduntan founded Bee-Craft Consult,  with a vision to be a “worthy example for making a living through beekeeping, empowering others, and sustaining our natural environment.

Oduntan said beekeeping is a thriving endeavour, which can help raise income level of local entrepreneurs and create employment for youths.

He said he was ready to train more Nigerians on commercial beekeeping through online classes and hands-on demonstration classes.

Since arriving in the US, Oduntan’s work has led him to European countries, such as Germany, Italy and Austria, with exceptional beekeeping practices.

He has expanded his knowledge and improved his skills, increasing his passion for beekeeping in Utah, US.

He added that learning to manage hives was critical for the sustainability of the business. Each beehive, he explained, could produce a lot of honey, but it depends on various factors, such as location, weather, temperature, pests, and local flora.

According to him, with better management, some hives can produce larger amount. With proper management, Oduntan said a hive can become profitable, especially if the beekeeper is willing to consider other streams of revenue.

During training, Oduntan exposed participants to the potential of beeswax, which can be converted to products, such as candles, soap, and lip balm.

He also trains people on how to produce bee pollen, which provides a lot of health-related benefits.

He wants people to eat healthy and replace sugar with honey in their food and beverages. He has built a large online community of honey lovers across the world.

With the rising interest of entrepreneurs in bee farming, and individuals working at various levels and in various capacities to revive the practice, he sees a new future for the bee as well as for honey in the coming years.